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H-1B visas: Why US President Donald Trump’s visa move will likely have a limited impact on India

However, if the US extends the period of suspension and retains the curbs for a much longer period even when its economy rebounds, Indian industry — especially IT — will be hit, analysts say.

H-1B visas: Why US President Donald Trump's visa move will likely have a limited impact on India

The US move to suspend the issuance of new non-immigrant visas, especially for skilled professionals, until December 31 will likely have limited impact on India, an official source told FE. But the government will initiate all possible steps to ensure that the visa system gets reinstated and the mobility of Indian professionals across the world doesn’t get hampered, he said.

The US issues around 85,000 H-1B visas for skilled workers every year, of which Indians — mainly IT professionals — get an average of about 60,000, or roughly 70% of all such permits. Since the current restriction is for six months, the number of applicants for visas that could be hit in the best case would be 30,000.

However, because of a growing local unemployment and a likely massive GDP contraction in the US in the wake of the Covid-19 outbreak, many in India were, in any case, expecting the Trump administration to issue only about 5,000-10,000 visas, the official source said. So the Presidential proclamation would hit the prospect of those many visas. Moreover, the move doesn’t alter the fate of the 3,00,000 H1-B visa holders from India already working there.

However, if the US extends the period of suspension and retains the curbs for a much longer period even when its economy rebounds, Indian industry — especially IT — will be hit, analysts say.

The Trump administration has temporarily suspended non-immigrant visas like H-1B, H-2B, L-1A, L-1B, J-1 and dependents. Individuals receiving these visas, or seeking entry into the US for the first time between June 24 and December 31,2020, won’t be allowed.

According to a CII survey released earlier this month, 155 Indian-origin companies have investments over $22 billion in the US and have created about 125,000 jobs. The survey also pointed at Indian investments having crossed $100 million each in 20 American states. It also said over the next five years, 77% of companies intend to raise their investments in the US, while 83% plan to hire more local employees.

However, US President Donald Trump has repeatedly asked foreign firms based out of the US to hire more local workers, rather than outsourcing jobs to cheaper economies. In 2017, Trump signed the ‘Buy American and Hire American’ executive order. This sought to create higher employment for American workers and to protect their economic interests by rigorously enforcing and administering America’s immigration laws.

According to a Brookings Institution study in 2013 titled ‘H-1B Visas and the STEM Shortage’, H-1B workers were paid more than their US-born counterparts with a bachelor’s degree generally. It also found that of the 20 occupations groups, wages for H-1B workers were significantly higher in as many as 17. An earlier study by Madeline Zavodny, a research economist with the Federal Reserve Bank of Atlanta, found that the entry of H-1B professionals neither reduced the contemporaneous earnings of natives, nor had an “adverse impact on contemporaneous unemployment rates”.

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